> In short, we are positive about the economy’s fundamentals and believe they can provide ballast in the event of a recession. Nonetheless, the bear-market bottom for stocks may still be 5%-10% away.
This is a bold prediction given that multiples are near all time highs [1]. The Schiller PE ratio suggests that in historically normal times stocks would be worth 50-60% less than they are today, and monetary policy is quickly returning to normal.